"Is it coincidence or trend?" Iran war disrupts inflation views in $50 trillion sovereign bond market.

Some of the world's largest bond markets seem to have already acknowledged that a spike in inflation in the 2020s may have been a one-off occurrence, but two spikes appear to be a worrisome new trend. The global economy has barely recovered from the previous round of price increases, and the Iran war has triggered a new round. A large portion of the world's fuel and fertilizer is stuck in the Strait of Hormuz, and the impact is spreading. European airlines are canceling flights, Americans are paying an extra 200 billion dollars just to refuel their cars, and Asian rice farmers are even considering not planting this season. Almost all experts believe that the situation will worsen further before it improves. The combination of various problems has already begun to impact the global financial sector's safest haven - the sovereign bond markets of the G7 countries, with yields hitting a twenty-year high this week, surpassing $50 trillion in scale. In short, investors are starting to worry that high inflation will persist, even as they haven't had such concerns during the most severe periods after the COVID-19 pandemic. They hope to be compensated for taking on this risk, and they expect central banks around the world to have to raise interest rates to curb inflation.